Sensex, Nifty end at new closing high, FO expiry eyed

Equity benchmarks ended at new closing high on Wednesday after two-day of consolidation and correction, ahead of expiry of August derivative contracts on Thursday, the last day of truncated week.

The cabinet committee members will be meeting in evening today, which also drove the market higher. Report suggested that the cabinet may clear divestment of government’s 5 percent stake in ONGC via offer for sale (OFS) and may approve coal supply linkages to power plants.

The 50-share NSE Nifty continued to hold the 7900-mark, up 31.30 points to close at 7936.05 while the 30-share BSE Sensex climbed 117.34 points to 26560.15. The BSE Midcap and Smallcap indices outperformed benchmarks, up over 0.7 percent.

Market experts expect the Nifty expiry around 7950-8000 levels. According to them, if the index surpasses 8000 level, there may be 100-200-point correction, which is short term, but the market remains positive in long term.

Devang Mehta – SVP & head equity advisory & retail sales, Anand Rathi Financial Services believes all signs of a structural bull market seem to be in place as market has been showing great bit of resilience.

“Macroeconomic parameters seem to have bottomed out. The negative events are digested & ignored after a day or two & focus shifts to sectors which have shown robust earnings growth,” he elaborates.

State-run ONGC topped the buying list in the Sensex, up 2.3 percent on reports that the petroleum ministry has formulated a plan to cut ONGC and Oil India’s oil subsidy burden by 40-50 percent to Rs 39,200 crore. Oil India was up 2.7 percent while BPCL, HPCL and IOC gained 0.8-2.6 percent.

HCL Technologies shot up 3.02 percent after Jefferies maintains a buy on the stock and has raised target price to Rs 1,860 from Rs 1,650 earlier. The brokerage says the slowdown in infra management servies was a concern but it believes the company will show quick turnaround.

Jindal Steel & Power rebounded today after a 20 percent fall in previous two sessions, topping the gainers list in Nifty, up 3.08 percent.

However, DLF fell 4.6 percent on Supreme Court order asking company to pay Rs 630 crore fine within three months.

Private sector lender HDFC Bank declined 0.7 percent as sources said the matter related to increase in FII investment limit may not be taken up by Foreign Investment Promotion Board in its meeting scheduled on August 29.

Shares of Sesa Sterlite, NTPC and BHEL were other prominent losers, down more than a percent.

GVK Power and Infrastructure gained 5 percent after the Hyderabad-based company said the subsidiary Mumbai International Airport (MIAL) has started monetisation of its commercial real estate by finalising lease of one of the parcel to Oasis Realty Private Limited for Rs 580 crore.

Shares of Venus Remedies jumped nearly 15 percent on signing agreement with Israel-based generic drug maker Teva for selling anti-cancer drug in Canada while UCO Bank fell more than 8 percent on reports that the finance ministry ordered for forensic audit in case of non-performing assets (NPA) of the bank.